The New Indexing

Index investing is now an umbrella term for strategies with elements common to active management.

Index investing is in the midst of an identity crisis. When John Bogle launched the first index fund 38 years ago, it was intended as a common-sense, cheap way for individuals to invest in stocks. The Vanguard 500 Index was not intended to beat the market, but simply ensure investors didn't get left behind.

A lot has changed since the mid-1970s, and index investing has morphed from an...